The billion dollar man who put us on the Web

Most people have never heard of him but Jim Clark eats bankers for breakfast and his companies have changed the world, says John Naughton: It took General Dynamics 43 years to become a billion dollar corporation but Netscape did it in about a minute

Forget Bill Gates. Forget Steve Jobs. Forget Larry Ellison of Oracle or Scott McNealy of Sun Microsystems. Forget even Steve Balmer, Gates's screaming, hyperactive, 200-decibel sidekick. The most interesting billionaire on the planet is a Texan engineer most people have never heard of. He's the only man in history to have started three billion-dollar companies - and he may well be on his way to creating a fourth. His name is Jim Clark and he's just been immortalised in a riveting new biography by Michael Lewis, the writer who lifted the lid on Wall Street with his book Liar Poker.

Even if you're not a nerd, your life has been touched by Clark. If you've ever driven a car or been to see Star Wars or a Spielberg film then you've experienced something that's been designed or made with the products of Clark's first company - Silicon Graphics Inc. If you use a Netscape browser to access the World Wide Web then you're a beneficiary of the company Clark launched in 1994 and took public only a year later, triggering the frenzy that lets Internet firms surge on the stock market before earning a cent in profits.

And if you live in the US and have been to see your doctor recently, the chances are that the surgery's interactions with your health insurance company have been orchestrated by Healtheon Corporation, the company Clark founded to link doctors, insurers, pharmacies and patients via the Internet, eliminating the paperwork from America's gargantuan healthcare industry.

It was Clark who triggered the US Department of Justice's anti-trust investigation into Microsoft and he recently launched two more start-ups - MyCFO.com, a personal finance site for the ultra-rich, and Shutterfly.com, an online photographic processing and delivery service.

At first sight he looks avuncular with thinning white hair, wire-rimmed spectacles and a lovely smile. But do not be deceived: behind that amiable façade is the nearest thing Silicon Valley has to a force of nature - an ungovernable, relentless, mercurial, capricious, inventive character who transformed the computing industry, spawned the Internet boom and eats bankers for breakfast.

'Rather than piloting the lead car,' wrote one computing insider, 'Clark has generally been out in front of everyone building the track itself, determining where the damn thing is headed.' But his originality is just one of the things that makes him special.

To many software engineers, Clark walks on water not just because he's a great engineer himself but because a prominent venture capitalist committed suicide after Clark refused to sell him a slice of one of his start-ups. To appreciate the significance of this, you have to remember that software engineers see themselves as farmers and venture capitalists as locusts. No banker, in the engineers' view, has ever created anything tangible.

The people who invent the technologies that shape our lives are not usually the ones who become rich and famous. The serious rewards go to the capitalists who drip-feed funds for development in return for the lion's share of the proceeds. The game is rigged so that the people who really matter usually get shafted. This bitter lesson is one that Clark learnt early in his career.

As an academic at Stanford in the late Seventies, he designed a computer chip that could process three-dimensional images in real time, allowing engineers to model designs on a computer screen and save months of work - and their employers millions of dollars. He called his chip the Geometry Engine, hired some graduate students and in 1982 set up Silicon Graphics, one of the seminal companies of the new digital economy. 'Jim's logic was that the world was three-dimensional, and so the computer would have to be too,' one of his students recalled. 'He thought the right way to interact with machines is the way you interact with the world.'

Along with Nasa, Hollywood was quick to spot the possibilities of the Geometry Engine, and George Lucas and Steven Spielberg were among Clark's first customers. He also began attracting the best engineers in Silicon Valley. But to finance Silicon Graphics, Clark sold a 40 per cent stake for a mere $800,000 to venture capitalist Glenn Mueller of the Mayfield Fund. The money lasted less than a year and then Mueller bought another chunk of the company, this time for $17 million.

Later, Clark and his engineers were obliged to sell even more of the equity, leaving them with an ever-diminishing piece of what eventually became a very profitable pie. As Silicon Graphics prospered, its founder became increasingly marginalised as the bankers employed suits to ride herd over the engineers. Clark fumed as he watched his baby being strangled. Mueller brought in Ed McCracken, a former vice-president at Hewlett-Packard, as the company's chief executive.

Clark and McCracken fought bitterly and at one point Clark replaced the nameplate on the chief executive's door with one reading 'Ed McMuffin'. It is said that Ed took three days to notice the switch. Clark quit and looked for something new. He was not poor, but he was a pauper compared to the guys who had bought his equity at fire-sale prices.

The year was 1994 and the new thing turned out to be the Web. With Marc Andreessen - the student who created Mosaic, the first of the big browsers - Clark founded Netscape Communications. He was besieged by venture capitalists after a slice of the action. But this time he resolved to do business on his own terms. Clark left them dangling for weeks before selling a 15 per cent stake to John Doerr of Silicon Valley's blue chip firm Kleiner, Perkins, Caufield & Byers for $18m, leaving himself with 25 per cent. These were terms hitherto unknown in Palo Alto where engineers had traditionally approached Doerr & Co on bended knee.

Mueller - the man who collared 40 per cent of Silicon Graphics for $800,000 - begged to be cut in on the Netscape deal. Clark memorably told him to get lost and Mueller shot himself in the head a week later. It turned out that he had suffered from paranoid delu sions that everyone in the Valley was out for him.

Shortly after Netscape launched its first browser, Clark decided to float the company. Most people - especially the bankers - thought he was nuts. The prevailing wisdom was that a firm had to show at least four consecutive profitable quarters before peddling its shares to investors. With nothing on its balance sheet but buckets of red ink Netscape went public in August 1995. The shares opened at $28 and soared in seconds to $74.75. The dot.com era had arrived.

The following day a slightly stunned Wall Street Journal observed that it had taken General Dynamics 43 years to become a corporation worth $2.7 billion, but Netscape Communications had achieved the same thing in about a minute. The success of what every one had regarded as a premature flotation consolidated Clark's reputation as a genius. His had been - so the story went - a wonderful intuition. Only now has it been revealed by Michael Lewis that the main reason for the hurried launch was that Clark had decided to build himself the biggest computer-controlled yacht in the world and needed the cash, pronto.

On such hinges does history turn. Another came when Clark encountered the US healthcare system at first hand. He was badly injured in a motorcycle crash and then diagnosed as suffering from a blood disease that required regular trips to the doctor. In both cases, he got frustrated with the long waits and complicated forms.

Why not, he mused, use the Internet to eliminate paperwork by linking doctors, patients, pharmacies, health plans and benefits administrators to a central store of information? He founded a company, Healtheon, which would control that depository and collect a small fee for each transaction. Given that the healthcare sector is worth $1.5 trillion annually, Healtheon could make billions even if it only handled a fraction of medical transactions.

Like most of Clark's ideas, it was off the wall. Nobody else would have the gall to tackle the byzantine complexity of the US healthcare system. The fact that he knew almost nothing about it was no deterrent - detail is not Clark's thing. He deals only in Big Ideas, relying on the engineers who follow him to hell and back to figure out the software necessary to implement them.

This is why his biographer describes him as the nearest thing the corporate world has to a conceptual artist - envisaging things that might be rather than concentrating on what is.

After a shaky start, Healtheon has blossomed. It now has connections to 150,000 physicians and 450 health plan payers and handles more than a million e-commerce transactions a month. Once it was up and running, Clark did his usual thing - disappeared to the Hyperion, his gargantuan sailing boat, like Ahab chasing his own soul.

Many of his best ideas seem to come from introspection. As someone who lives the kind of pathologically peripatetic life that only those with private jets and unlimited money can sustain, he has neither the time nor the inclination to manage his personal wealth. So he has now dreamed up another company - MyCFO - that will do it for him, and the hosts of other millionaires on the planet.

Lewis's book ends when MyCFO was still a gleam in Clark's eye. But now it's up and running, claiming 'exceptional, unbiased, and integrated services' to simplify the complex financial lives of the super-rich. 'By combining extensive expertise and unsurpassed client service with the power of the Internet,' its website proclaims, 'MyCFO will enable each client to benefit from a personal relationship with the best professional advisers while gaining unparalleled online access to their complete, real-time financial information.'

It's a wild idea, and without the $10m entrance fee few of us are going to be able to give it a proper road test. But what's really neat about MyCFO is that its clients are also its investors. It only needs a few of Clark's fellow billionaires to sign up to have as much resources under its control as many Wall Street fund managers.

And then the geek who swore he would never again be swindled by a banker will truly have had his revenge.